Tapjoy (formerly known as Offerpal Media) has raised $21 million in new funding led by Rho Ventures, with D. E. Shaw Ventures, InterWest Partners and North Bridge Venture Partners participating in the round. The latest investment brings the company’s total funding to over $40 million.

Following the Scamville drama in 2009, Offerpal went through a significant transition. The company is on its third CEO since November 2009 (Mihir Shah took the role in September 2010). And after Facebook transitioned games and applications from Offerpal’s currencies to Facebook Credits and partnered with rival Trialpay, the company was forced to lay off people who worked on its Facebook monetization initiatives.

But Offerpal shifted strategies and recently launched distribution platform Social K-Factor, which aims to relieve any game developer that was hurt by Facebook’s recent decision to seriously cut down on the many ways they could distribute notifications via the social networking site in order to get new users to sign up. Social K-Factor aims to enable game developers to connect with audiences across social networks and media platforms such as Yahoo and Google, opening the doors to massive distribution of game-related notifications to roughly 1 billion users in over 150 countries.

And along the way, Offerpal acquired Tapjoy, a mobile app monetization platform. Using the platform, developers of mobile and social apps can turn on virtual currency, analytics and other monetization tools to their iPhone, Android and Facebook apps.

The company says that more than 5,000 app developers and advertisers are using Tapjoy for
the monetization and distribution of their games and applications, including GameDuell,
Tapulous, glu, Pinger, Playdom, Kayak, Barnes & Noble, MTV, Bing, Fandango, Groupon,
Intuit and others.

Last fall, Offerpal officially changed its name to Tapjoy, marking its change in overall direction for the company. While the startup is still in the offers business, Shah says that Tapjoy’s direction is much broader and the name reflects the shift. He adds that game offers on social networks are still a profitable business and has no plans to abandon this side of the business. Of course, the change in name also helps the company move away from its “Scamville”-tainted past.

Shah tells us the new funding allows the company to further invest in its services platform for app developers on mobile and social platforms. He adds that the company feels strongly about investing in providing a cross-platform infrastructure, for both mobile applications as well as Facebook apps. Tapjoy will also use the funds to further invest in application media licensing and incubation opportunities.

As for the health of the company under a new brand, Shah says that the fourth quarter of 2010 was best quarter in terms of revenue, profits, and margins in the startup’s history. If Tapyjoy/Offerpal can manage to shed the Scamville-drama and turn the company around into a thriving business, it be a great example of how any startup can recover from a major speedbump. And everyone loves a good comeback story.